that integrate the operations of large busi
nesses, such as Sberbank, the state savings
bank. Karachinsky's IBS Group now employs
close to 2,000 people and adds another few
hundred every year. Its revenues increased by
50 percent in 1997 and in 1999.
Seeking good managers, Karachinsky made
Dmitriev and Panov an alluring offer that
included the opportunity to link some of Rus
sia's industrial giants through an Internet
supply-and-sales network.
"Peter and I had tremendous possibilities
in the U.S.," said Dmitriev, a tall, exuberant
man with light brown hair. "But we came back
or Academic City,a utopian Soviet-era community in
because we feel it's our home, and there's a cer
tain responsibility that goes with it. We're play
ing a real role in this country as it grows. The
level of influence we have is so much greater
than we'd have in the U.S."
I met the pair in IBS's Moscow headquar
ters, a modern, glass-and-concrete building set
back from the capital's grimy Dmitrovskoye
Highway. Like some other young Russian busi
ness people, Panov and Dmitriev believe that
the robber baron phase of Russian capitalism is
gradually fading as oligarchs seek legitimacy.
"Up to now, money has been made by
people dividing up different pieces of the old
Siberia built to gather the nation'stop scien
tists. Now thatstate supportfor researchis
drying up, theirideas help run theirown fleet
of business enterprises.
state pie," said Dmitriev. "The oligarchs were
thinking, 'How can I take away this guy's piece
of the pie?' Now the pie has been more or less
divided up, and the oligarchs are thinking,
'I can't take this guy's pie because he's too pow
erful.' So they want to grow their piece of the
pie, they want good managers running their
businesses, and they want respect, because in
Russia it's all about respect."
Panov interjected, "Their horizon used to be
really short. During privatization they wanted
to take what they could and get out. Now their
horizon is way, way longer."
And that, Dmitriev and Panov say, is where
they and IBS come in. Karachinsky is bank
ing on it, and one afternoon as I talked with
him in his office, he served up the most cogent
analysis I'd heard of the Russian economy:
"There is the old economy of the U.S.S.R.,
and it has a much tougher road. Many enter
prises will first have to die to be reborn.
Then there's the resource economy-oil, gas,
aluminum-a large part of the gross domestic
product. It's making a good profit and moving
ahead. Then there's the new economy, the
economy that didn't exist ten years ago, and
we're part of that.
"If you just focus on the old economy, the
country looks in terrible shape," said Karachin
sky. "But something entirely new is being born
here. Russia is just at the beginning of an eco
nomic climb. Overall, I'm pretty optimistic."
It's easy to be
(Continuedon page 18)